The ECGC Limited is a company wholly owned by the Government of India based in Mumbai, Maharashtra. It provides export credit insurance support to Indian. Besides above, ECGC also offers some Special Schemes, such as Transfer guarantees, (covering risk on transfer of funds), Scheme for Small Exporters. Special Schemes – ECGC. Suitability. Special schemes consists of bundle of covers addressing the needs of banks and investors in foreign venture. This apart .
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This Policy can be for covering only political risks or for covering comprehensive risks i. Normally, there should be a bilateral agreement between India and the ecgf country for promotion and protection of Indian Investment.
Loans advanced by way of a formal agreement but not tied to export of goods and supplies are eligible for cover. Where the contract provides for supply and erection of a complete plant, the first instalment may fall due after six months ectc the date of commissioning of the plant.
In case of loan, the insurance will cover the principal as well as interest actually earned.
The exporters have to submit annual report about the progress and working of the Project. Cover for dividend receivables may not be given in case of scheem countries; cover only for original ecg.
It would be necessary for the interested persons to consult ECGC for ascertaining specific terms of cover. There are cases where even government or central bank guarantees are available safeguarding payments. The period of insurance cover would not normally exceed 15 years. This page was last edited on 23 Novemberat The National Export Insurance Account NEIA has been set up by the Government of India to provide credit insurance support to exporters where ECGC is not in scgeme position to do so due to its own underwriting constraints and where the export is strategically important in the long term interests of the country.
Oll covers only political risks of war, expropriation and restrictions on remittances. Export credit agencies Foreign trade of India Ministry of Commerce and Industry India Government-owned insurance companies of India Financial services companies based in Mumbai Financial services companies established in Indian companies established in Premium Rate Base rate 2.
In order to protect such exporters ECGC has the following types of covers. Besides, the Contract value itself may only be an estimate of the work to be done, since the Contract may provide for cost escalation, variation contracts, additional contracts, etc. Payments scheje exports schemee open to risks even at the best of times.
These scheme are targeted at specific audiences such as banks, investors in foreign countries and exporters taking up long term projects abroad, covering distinct risks faced by them. Export of capital goods on deferred payment terms and execution of turnkey Projects, construction works contracts as also rendering of services abroad are schrme referred to as Project exports.
It is managed schemme an Asset Management Company comprising representatives of the Government, Reserve Bank of India, banking, insurance and exporting community.
The same exchange rate shall be used by the Contractor for the purpose of submitting periodical declarations to the Corporation.
As the post-shipment guarantee is mainly intended to benefit the banks, the cost of premium in respect of the Whole Turnover Post-shipment Guarantee taken out by banks may be absorbed by the banks and not passed on to the exporters. The overseas investment ecgf be sheme either by way of equity or by way of loans Equity Any contribution made to the enterprise in return for ecgf either by cash remittances or by way of export of capital goods or services can be covered.
Such transactions are, therefore, insured by ECGC on a case-to-case basis under specific policies. Economic difficulties or balance of payment problems may lead a country to impose restrictions on either import of certain goods or acheme transfer of payments for goods imported.
It is, therefore, the appropriate policy for an exporter to take if the payments are open to both commercial and political risks. The confirming bank will suffer a loss if the foreign bank fails to reimburse it with the amount paid to the exporter. ECGC provides protection to banks against non-payment of post-shipment credit by exporters.
The overseas investment may be made either by way of equity or by way of loans.
The types of guarantees issued by Indian bank are:. It is, therefore, important that the Contractor ensures that the Contract is well drafted to provide clarity of the obligations of the two parties and for resolution of disputes that may arise in the course of execution of the contract.
The former covers political risks in respect of contracts with Overseas Governments or where Government and the latter comprehensive risks guarantee the payments. On 22 April how to work ecgc in different payment terms? Premium rates for Contract Policies will be higher than that for Shipment Policies. The balance xcheme of the premium will have to be paid only if the exporter succeeds in the bid.
Export Credit Guarantee Corporation of India
Equity Any contribution schemw to the enterprise in return evgc shares either by cash remittances or by way of export of capital goods or services can be covered. Dividend and Profit In case of equity the investor can choose to cover the original investment as well as his share of retained earnings and dividends declared, to the extent they are eligible for repatriation.
This policy can be for either Political Risks alone or for Comprehensive Risks. ECGC Ltd, was established in July, to strengthen the export promotion by covering the risk of exporting on credit. Features of this scheme are Ecgx investment made by way of equity capital or untied loan for the purpose of setting up or expansion of overseas projects will be eligible for cover under investment insurance. Export Performance Guarantee Export Performance Guarantee is an insurance cover for banks, which issues various kinds of guarantees on behalf of exporters in order to facilitate export transactions 4.
Features of this cover are:. Views Read Edit View history. The commercial risks of a foreign buyer going bankrupt or losing his capacity to pay are aggravated due to the political and economic uncertainties. Initially cover is schmee for 3 years.
ECGC enters into agreement with the exporters for providing cover mentioning the terms and conditions alongwith the maximum scueme. However, cover can be extended for payment specified in other convertible currencies at the discretion of ECGC.
ECGC Schemes: EEPC India
A coup or an insurrection may also bring about the same result. The rate of premium is 0. The political risk policy on the other hand provides protection against political risk policy.
It covers exchange fluctuation risk of exporters of capital goods, civil engineering contractors and consultants who may have to receive foreign schemd payments over a period of years for their exports, construction works or services. If the loss exceeds 2 percent, ECGC will make good the portion of loss in excess of 2 percent but not exceeding 35 percent of the reference rate.
The investment should not in any way conflict with the policy of both our government and the overseas government. While the premium rate for Guarantee issued to cover bond relating to exports on short-term credit is 0. The Comprehensive Risks Policy provides protection against commercial risks such as Insolvency of Buyer, xcheme default, non-acceptance of goods shipped in addition to covering political risk of war, civil war, exchange transfer delay ecfc.
As the investor would evgc having a hand in the management of the joint venture, no cover for commercial risks would be provided under the scheme.